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    • Chinese Yuan Falls Sharply as Donald Trump Declares US Election Victory
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    Chinese Yuan Falls Sharply as Donald Trump Declares US Election Victory

    Pabio Posted on

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    China’s yuan posted a sharp decline amid growing uncertainty as Republican candidate Donald Trump declared victory in the US presidential election.

    On Wednesday, the offshore yuan fell below 7.19, before regaining ground.

    International investor uncertainty should translate into a stronger U.S. dollar, at least in the short term, said Nick Marro, senior Asia economist at the Economist Intelligence Unit.

    The inflationary impact of Trump’s proposed trade tariffs It would also complicate prospects for monetary easing in the United States, particularly if consumer prices rise above 3 percent, which is very likely if Trump follows through on his policy threats, Marro added.

    “A stronger U.S. dollar in the long term, along with higher U.S. interest rates in the long term, could preserve the wide interest rate differential between the United States and China, especially as the parameters Chinese monetary policy remains accommodative,” he said.

    Pabio
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